New House Bill Would Enhance Transparency in Government Spending

It goes without saying that there has been a seemingly constant deluge of important events and developments recently, ranging from the continuing devastation of the COVID-19 pandemic to ongoing protests against police brutality and racial injustice to a controversial Supreme Court nomination to the Lakers winning another championship. That’s why it would be completely understandable if you didn’t notice when the House of Representatives introduced sweeping legislation late last month aimed at addressing abuses by the executive branch.

That legislation, the Protecting Our Democracy Act, contains a wide range of essential reforms that would rein in an increasingly unfettered executive branch. Some of those reforms include strengthening the Hatch Act to crack down on executive branch officials misusing their positions for political or electoral purposes; protecting inspectors general from political pressure and promoting their ability to investigate waste, fraud, and abuse within the executive branch; enacting enhanced protections for whistleblowers in order to allow them to come forward and expose wrongdoing and corruption without fear of reprisal; and a whole smorgasbord of other reforms the Project On Government Oversight (POGO) enthusiastically supports.

One of the most important areas addressed in the Protecting Our Democracy Act is one that hasn’t received enough attention: Congress’s power of the purse, or its exclusive control over tax and spending decisions. In fact, in our view, the issues the reforms address represent some of the trickiest and most easily abused tension points between Congress and the president. This matters because the American taxpayers need to know who is doing what with their hard-earned tax dollars, and when the executive branch is allowed to operate behind a wall of secrecy, the likelihood of abuse and corruption increases exponentially.

The Constitution unambiguously gives the power of the purse to Congress via article I, section 9, but over time the executive branch has increasingly flexed its muscle in this area. In the interest of giving credit where credit is due, the power of the purse reforms contained in the Protecting Our Democracy Act were derived from the Congressional Power of the Purse Act, a bill championed primarily by House Budget Committee Chairman John Yarmuth (D- KY).

Congress’s power of the purse is essential to the very purpose of our legislative branch. Through the ability to craft tax policy and appropriate the funds produced by that policy, Congress plays the lead role in determining how the American people’s money will be spent and for what purposes it will be spent. Congress enacts specific directives about spending via appropriations legislation, which then authorizes the executive branch to implement those directives according to the parameters that Congress has laid out. In this way, the branch that is closest to the people and that must answer most directly to us is also the one that has the solemn responsibility of managing taxpayer dollars.

Through a law enacted in 1974, the president has the ability to ask Congress to make “rescissions” to money Congress has allocated for some specific purpose or another.

A rescission is simply a decision to not spend money, a decision that could theoretically be perfectly valid if, say, a program’s objectives could be achieved with less money than was originally anticipated. So long as the president proposes a rescission in accordance with the legal requirements and Congress approves that request, everything is kosher. And most presidents have proposed rescissions while complying with those parameters. The problem is that it is easy to abuse the rescission process through a bureaucratic sleight-of-hand if a president simply wants to cut off funding for some program or policy that they don’t support. Although the law requires the executive branch to request permission to not spend the money, a president could wait to submit that request until just before the appropriation expires—a tactic that could produce a “backdoor rescission” without approval from Congress. Reports have indicated that the Trump administration has considered attempting this sketchy maneuver before. The George W. Bush administration also engaged in some illegal withholding of congressionally appropriated funds in 2005.

While the Obama administration never violated appropriations law by withholding or delaying funds, federal agencies did get caught breaking the law by spending funds without explicit congressional approval on several occasions, showing us that playing fast and loose with Congress’s rightful purview over the power of the purse is a bipartisan problem.

This kind of gamesmanship directly undermines the power of the purse and is a finger in the eye of Congress—and therefore of the American people. Specifically, unaccountable efforts to cut off funds could be used to simply stop programs depending on the policy whims of the administration at the time, which is not the way our system, with the rule of law as its central pillar, is supposed to work. The Protecting Our Democracy Act would prevent this kind of abuse by requiring a longer timeframe for rescission requests and explicitly mandating that money must be allocated in a timely manner so the intended purposes and objectives can be carried out.

The bill also addresses the thorny issue of apportionments, which is the specific way the executive branch disburses funds to federal agencies. Once appropriated money leaves Congress’s door, it’s up to the executive branch to faithfully spend that money in accordance with Congress’s intent. The central issue with the apportionment process is that it happens entirely in the dark, with neither Congress nor the general public having timely access to information about how the executive branch actually disburses that money. As a result, there’s no real-time way to know if the executive branch is spending the money as intended. Federal agencies are legally bound to use funds as apportioned by the executive branch, and by the time Congress and the public find out the money wasn’t spent in the way it was supposed to be, it’s too late to do anything about it. The Protecting Our Democracy Act would require that all apportionments automatically be made publicly available, and would require agencies that have received an apportionment to notify Congress if it would have unintended impacts on programs enacted through legislation.

By implementing restrictions on the rescission process and requiring more transparency and disclosure around apportionments, the bill would ensure that the public and the legislative branch have a lot more insight into whether public funds are being managed effectively and honestly. This enhanced visibility into the process would significantly cut down on the potential for secretive fiscal malfeasance by the executive branch and promote a more effective and accountable government overall.

The Protecting Our Democracy Act would also formally codify a requirement that the executive branch cooperate with the Government Accountability Office (GAO) in its investigations. The GAO serves an essential function as one of Congress’s indispensable oversight resources. GAO is tasked with conducting audits and investigations with regard to how the federal government is managing taxpayer dollars and other public resources. Along with inspectors general, GAO is one of the most important government oversight tools, serving as the eyes and ears of the American people. Without an empowered and resourced GAO, it will be difficult to ever ensure good stewardship of the country’s scarce fiscal resources and to promote confidence that we are getting the return on our investment that we deserve. If the agency were properly resourced and its recommendations implemented, GAO estimates that it could save taxpayers billions of dollars by reducing duplicative spending and other kinds of mismanagement.

Until recently, it was executive branch practice to cooperate with GAO when it looked into potential violations of budget and appropriations law, but the Trump administration has ceased directing agencies to cooperate with GAO.

The legislation goes further by including tools to enforce the requirement that the executive branch cooperate with GAO. One of GAO’s weaknesses is that the comptroller general of the United States—who leads the agency—does not have sufficient authority to bring agencies to federal court in order to enforce cooperation with the agency’s investigations. This lack of standing hinders GAO’s ability to access the information it needs to do its job. This bill would expand the comptroller’s options in terms of the kinds of suits the agency can bring and the circumstances under which those suits may be brought, including for violations of the Impoundment Control Act.

The Impoundment Control Act is one of the cornerstone appropriations and budget statutes, and it gained newfound notoriety after GAO found that the Trump administration violated the law when it withheld security assistance funding that Congress had appropriated for Ukraine in the summer of 2019. Unfortunately, there are no penalties for violating that law. This means that there is less of an incentive to follow it, as we saw so vividly in the Trump administration’s behavior around Ukraine funding. The Protecting Our Democracy Act would change this incentive structure by enacting non-criminal penalties for instances where GAO has determined that an Impoundment Control Act violation has been perpetrated. The aim is to give the law some teeth and engender better compliance. This, in turn, would help ensure that the executive branch is spending the money Congress has allocated for the purposes it was allocated for. GAO is a key player in ensuring that the executive branch complies with the law, both to avoid excess spending of taxpayer funds and to avoid illegal cut-offs of those funds.

Finally, the Protecting Our Democracy Act would address a longstanding but often overlooked problem—the ability of the Department of Justice’s Office of Legal Counsel (OLC) to secretively issue memoranda that expansively interpret the executive branch’s authority. Similar to apportionments, OLC opinions are legally binding on federal agencies and are often not disclosed to Congress or the public. What this means in practice is that apportionments and OLC opinions on budget and appropriations laws form a shadowy body of secret law that can and often does circumvent the intent of Congress and, by extension, the will of the American people. In fact, the OLC has a well-earned reputation for providing dubious legal justifications for whatever a given president wants to do at the time. The Protecting Our Democracy Act would require OLC to make publicly available any memorandum that interprets the executive’s authorities as they pertain to the budget or appropriations process. This enhanced transparency would improve Congress’s ability to respond should the executive branch take too permissive a view of its own authorities, which it almost always does.

Taken together, these policy changes represent a much-needed dose of accountability and transparency to the federal government. The provisions in this bill that relate to recalibrating the growing power imbalance between Congress and the executive branch when it comes to exercising the power of the purse are absolutely crucial and should not be given short shrift. If the American people deserve anything, they deserve to know that their government is managing their precious resources with integrity and in the bright light of day. The only way to make that ideal a reality is to fundamentally transform the process that governs the management and distribution of public dollars and guards against corruption. Enacting the Protecting Our Democracy Act and its power of the purse reforms would do exactly that.